MB-920 Describe Dynamics 365 Supply Chain Management Practice Question
A company uses Dynamics 365 Supply Chain Management. They need to calculate a costed bill of materials (BOM) that includes manufacturing overhead. Which costing method should they use?
⚠ Common exam trap
A common mix-up: candidates confuse inventory costing methods (Moving Average, Standard Cost, FIFO) with the BOM calculation process, assuming any costing method can calculate a costed BOM with overhead, when only the BOM Calculation with Costing Sheet is designed for that purpose.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
BOM Calculation with Costing Sheet
D is correct because the BOM Calculation with Costing Sheet is specifically designed to calculate a costed bill of materials that includes manufacturing overhead. In Dynamics 365 Supply Chain Management, the costing sheet allows you to define overhead rates, such as machine or labor overhead, and automatically apply them during BOM calculation, ensuring the total cost reflects both material and overhead components.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Moving Average
Why it's wrong here
Moving Average is for inventory valuation, not BOM cost roll-up.
- ✗
Standard Cost
Why it's wrong here
Standard Cost uses fixed costs; overhead must be added separately.
- ✗
FIFO
Why it's wrong here
FIFO is an inventory valuation method, not for BOM costing.
- ✓
BOM Calculation with Costing Sheet
Why this is correct
BOM calculations with costing sheet can include manufacturing overhead.
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